Yen Shrugs Off Manufacturing PMI, BOJ Remains Expansionary
- Manufacturing PMI falls to 52.2 vs 52.4 in June
- Lowest reading for index since November 2016
- BoJ monetary policy to remain expansionary
The Japanese Yen held steady against its major counterparts as July’s manufacturing purchasing managers’ index showed its lowest reading since November 2016. This month’s manufacturing PMI crossed the wires at 52.2, falling from the 52.4 figure recorded in June.
While this was the lowest reading since late 2016, today’s PMI figure marked the eleventh consecutive month of expansion for this inflation measure - a reading above 50 signals expansion and less than 50 would signal contraction.
With the Bank of Japan recently pushing out the expectation to reach its 2 percent inflation target until 2020/2021, it is doubtful that Japan’s extraordinarily expansive monetary policy will firm up anytime soon. This may explain the lackluster reaction from the Yen to local economic figures.